Once the relevant market is defined, a key concern in the antitrust review of a merger turns on whether the principal actor would wield market power sufficient to stifle competition, potentially resulting in harmful effects for consumers such as higher prices and fewer choices. Arguing that the Internet has disintermediated the record labels, supporters of the acquisition contend that the emergence of digital channels available to artists and consumers alike has effectively ended the era of top-down music distribution.

But that argument rings hollow to critics who point out that more than half of the Billboard Hot 100 songs of 2011 came from artists associated with UMG or EMI, and that independent labels, while growing in number, are still a footnote measured against the majors.

"Don't believe them when they say market share is not market power," said Martin Mills, founder and chairman of Beggars Group, a management firm overseeing independent labels. "Market power is why they're doing this," he added, terming Grainge and Faxon "monopolists."

UMG's proposed $1.9 billion acquisition of EMI is currently under review at the Federal Trade Commission and the European Commission.

At Thursday's hearing, lawmakers considered the proposed acquisition in the context of the rapidly evolving digital music space, where startup ventures such as Spotify look to reach licensing agreements with the major labels to flesh out their online catalogs in a bid to offer consumers alternative choices to discover and, potentially, purchase music.